UNIT 1 CONCEPT AND EVOLUTION OF Concept and

Evolution of
HUMAN RESOURCE Human
Resource
MANAGEMENT Management

Objectives
After completion of this unit you should be able to:
 Understand the meaning and concept of Human Resource
Management (HRM);
 Trace the evolution of HRM;
 Understand the scope and objectives of HRM; and
 Explain various components of HRM;

Structure
Introduction

What is HRM?

Evolution of HRM

Objectives of HRM

Importance of HR

Scope of HRM

Nature of HRM

Components of HRM

Summary
Self Assessment Questions

Further readings and References

INTRODUCTION
―You must treat your employees with respect and dignity because in the
most automated factory in the world, you need the power of human mind.
That is what brings innovation. If you want high quality minds to work for
you, then you must protect the respect and dignity.‖
Mr. N.R. Narayana Murthy, Founder, Infosys Ltd.

Among the five Ms of management, namely, men, money, machines,

materials, and methods., HRM deals with the first M, Men are what we refer
to as "human resources." Human resources are an organization's most
valuable and unique asset. Human resource management is a dynamic and
challenging task for any organisation, especially in the age of globalisation
and rapid technological change. As a result, all managers must be aware of
7
Introduction the concept of HRM and its significance in the workplace. This being the first
to Human unit of the course on HRM, we shall cover the evolution and concept of HRM
Resource
Management along with its objectives and scope. As a field of management functions,
HRM has undergone many changes over the years giving it a strategic role in
an organisation.

WHAT IS HRM?
HRM is the process of acquiring, developing, maintaining, and retaining
human resources in an organisation with the strategic objective of achieving
organisational goals. So, what is the significance of the term "human resource
management"?
Human: This term refers to an organization's required
workforce. The term Resource refers to an organization's
workforce
Management supply.
refers to the most efficient use of resources in order to achieve
organisational goals.
Many eminent management scientists have defined HRM in different ways.
Some of the widely used definitions are provided in the Box 1.

Box 1: Definitions of HRM

A. Edwin B. Flippo - ―Human resource management is planning,

organizing, directing and controlling of the procurement,
development, resources to the end that individual and societal
objectives are accomplished‖.
B. Decenzo and Robbins - ―HRM is a managerial process of acquiring
and engaging the required workforce appropriate for the job and
concerned with developing, maintenance and utilization of
workforce‖.
C. Desseler -―the policies and practices involved in carrying out the
‗people‖ or human resource aspects of a management position,
including recruiting, screening, training, rewarding, and appraising
comprises of HRM‖.
D. French Wendell - ―Human resource management is the recruitment,
selection, development, utilization, compensation and motivation of
human resources by the organisation‖.
E. Storey - ―A distinctive approach to employment management which
seeks to achieve competitive advantage through the strategic
deployment of a highly committed and capable workforce, using an
integrated array of cultural, structural and personnel techniques‖.

In essence, HRM is a strategic approach to acquire, motivate, develop and

manage human resources of an organisation. For each of these functions there
8 are policies which the HR Managers follow keeping in view the
Introduction the concept of HRM and its significance in the workplace. This being the first
to Human unit of the course on HRM, we shall cover the evolution and concept of HRM
organizational culture.

8
EVOLUTION OF HRM
HRM has evolved from the Personnel Management (which was the earst-
while management system to manage employees). Going back to the roots of
evolution of personnel management the contributions of Psychologists and
management experts such as Elton Mayo, F.W. Taylor and Robert Owen play
a significant role.Elton Mayo was the founder of the human relations
movement in the 1920s. In the famous Howthorne study, he measured the
relationship between productivity and the work environment. He emphasized
the influence of human relations on worker productivity. Similarly, Robert
Owen is considered to be the creator and initiator of reforms introduced for
workers. He introduced the principle of ‗8 hours work per day‘ . Owen
recognised the importance of improving working conditions in the workplace
and its impact on worker productivity and efficiency. Also worth mentioning
is the contribution of Frederick W. Taylor. Taylor has developed a
differentiated compensation system that rewards employees with higher
performance levels , that are still used in the company. He promoted
Scientific Management through fours principles:
1. Evaluate a task by dissecting its components;
2. Select employees that had appropriate skills for a task;
3. Provide workers with inventives and training to do a task; and
4. Use science to plan how workers perform their jobs.

Human Resources Approach: However, at some stage in early 60s the ‗pet
milk principle‘, (advocating that happy workers are productive workers or
happy cows provide extra milk) of human relationists have been largely
rejected. Recognising the truth that workers are unique in their personal way-
having individual needs. Every employee is a unique and surprisingly
individual wishes. It was considered that each worker is a completely unique
and highly complex character with exceptional desires and values. What
motivates one worker won't encourage any other and being satisfied or
feeling appropriate may additionally have very little effect on the
productiveness of positive personnel. Slowly however steadily, the trend
closer to treating employees as resources or assets emerged.
The contribution of behavioural science to management practice consists
primarily of producing new insights in place of new strategies. It has

advanced and extended right into a useful way of thinking, about the position 9
Introduction of the supervisor, the nature of businesses and the behaviour of an individual
to Human inside an business enterprise.Let us look into these trends more closely by
Resource
Management examing the transformation of personnel management to HRM from one
stage to another by understanding its differences and stages of development.

Stages of Development of HRM

Modern concept of HRM has developed through the following stages (Gupta,
1997).
a) The Commodity Concept: Before industrial revolution, the guild
system was the beginning of personnel management. Guild was a closely
knit group concerned with selecting, training, rewarding and maintaining
workers. Labour began to be considered a commodity to be bought and
sold.
b) The Factor of Production Concept: Employees were considered a
factor of production just like land, materials, machinery. Taylor‘s
scientific management stressed proper selection and training of
employees so as to maximise productivity.
c) The Paternalistic Concept: Employees organised together on the basis
of their common interest and formed trade unions to improve. Also
employers began to provide schemes to workers. Employers assured a
fatherly and protective attitude towards their employees.
d) The Humanitarian Concept: It is based on the belief that employees
had certain inalienable rights as human beings and it is the duty of the
employer to protect. Rather social and psychological satisfaction was
equally important. in human problems of work place. This is also known
as Hawthorne Experiments of Douglas McGregor also generated
considerable interest human relations concept.
e) The Behavioural Human Resource Concept: It aimed at analysing and
understanding human behaviour in organisation. Motivation, group
dynamics, organisational climate, organisational conflict etc. became
popular under this concept. Employees began to be considered as
valuable assets of an organisation. Efforts were made to integrate
employee with the organisation so that organisational goals and
employees aspirations could be achieved simultaneously. Focus shifted
towards management practices like two way communication,
management by objectives, role of informal groups, quality circles etc.
f) The Emerging Concept: Now employers are considered as partners in
industry. They are given share in company‘s stock membership. Slowly
and steadily, HRM is emerging as a discipline.
The table 1 summarises the differences between personnel management and
HRM.

10
 Table 1: Difference between Personnel Management & HRM Concept and
Evolution of
Human
Aspect Personnel HRM Resource
Management
Management

Approach Short-term, Reactive, Long term, proactive

Adhoc integrated

Employee relations Pluralist, collective, low Unitarist, individualise

trust high trust

Role Specialist Integrated

Structure Bureaucratic, Flexible, decentralized

Centralised

Focus Cost minimization Maximum utilization

HRM essentially emphasizes and incorporates those expectations which are

not being fulfilled through the traditional personnel management. However,
few management scholars have opened HRM as ―old bottle with a new label‖
(Armstrong, 2020). It integrates in a meaningful way the numerous
subsystems like performance appraisal, career development, organizational
development, rewards management, employee relations etc. In the subsequent
units, we will be covering all these functions in detail.

…………………………………………………………………………………

HRM and its evolution in India

The history of HRM in India dates back to the early 1980s when Mr. Udai
pareek and Mr. T.V. Rao championed the cause of the HRM movement. The
early adopters of the HRM movement include public sector enterprises such
as Bharat Heavy Electricals Limited (BHEL), State Bank of India, etc.
Initially, Indian organizations used to have an industrial relations (IR)
department, which was subsequently re-christened ad the personnel & IR
department, with the welfare department as one of its sub-departments. The
personnel department predominantly suited the blue-collar employees since
their general awareness and educational levels were low and the approach
was more of administrative nature. The growing importance of the service
sector in the Indian economy has also highlighted the importance of change
in approach by the personnel and administrative departments. The profile of
an employee in the new scenario has the following features. 11
  Employees are mostly in their mid-twenties or early thirties.
 All employees are educated and their level of general awareness is high.
 Employees are more committed to the profession than to the
organization.
 The rates of attrition and the level of mobility of employees among the
organizations are high.

The organizations have to compete for scarce resources, the most important
among them being the human resources, more so in the case of the service
sector. This has called for the radical transformation of personnel and
administrative departments into human resource departments to reflect the
human facet of organizations. A glance at the structure of various Indian
organizations indicates that the majority of the organizations have
rechristened their personnel and administrative department as human
resource development (HRD) departments. However, this transformation into
the HRM mode is at various stages in different organizations. The
progressive players and market leaders, especially in the IT and service
sectors, have fully adopted this approach while other players are in the
process of adoption.
The transformed HR department performs the following functions:
 Participating in the strategizing sessions of business policy
 Preparing the HR strategies in coordination with the corporate strategies
 Implementing the various HR policies and practices including HR
planning, recruitment and induction, compensation structuring, career
planning, competence mapping, performance management, etc.

Overall, the HR department has outgrown its mere functional role and has
come to assume the responsibility of building the brand for all company to
attract the best available talent in the market and also to retain the existing
talent. This helps in reducing the recruitment cost and the replacement cost
apart from reducing the attrition rates, which helps the organization to
complete its projects in time. (Jyothi, P. and Venkatesh, D.N., 2006)

OBJECTIVES OF HRM
The primary objective of HRM is to make certain the provision of competent
human resources in the business enterprise so that it will contribute in
reaching organizational objectives.
According to Scott, Clothier and Spriegal, ―The objectives of
Human Resource Management, in an organisation, is to obtain maximum
individual development, desirable working relationships between employers
and employees and employees and employees, and to affect the moulding of
human resources as contrasted with physical resources‖.
Apart from this, there are other objectives too. Specifically, HRM objectives
are four folds: societal, organisational, functional, and personal.
12
Societal Objectives Concept and
Evolution of
The societal objectives are socially and ethically responsible for the needs Human
Resource
and challenges of society. While doing so, they have to minimize the Management
negative impact of such demands upon the organisation. The failure of
organisations to use their resources for society‘s benefit in ethical ways may
lead to restrictions. For example, the society may limit human resource
decisions to laws that enforce reservation in hiring and laws that address
discrimination, safety or other such areas of societal concern.
Organisational Objectives
The organisational objectives recognise the role of human resource
management in bringing about organisational effectiveness. Human resource
management is not an end in itself; it is only a means to assist the
organisation with its primary objectives. Simply stated the human resource
department exists to serve the rest of the organisation.

Functional Objectives
Functional objectives try to maintain the department‘s contribution at a level
appropriate to the organisation‘s needs. Human resources are to be adjusted
to suit the organisation‘s demands. The department‘s level of service must be
tailored to fit the organisation it serves.

Personal Objectives
Personal objectives assist employees in achieving their personal goals, at
least insofar as these goals enhance the individual‘s contribution to the
organisation. Personal objectives of employees must be met if they are to be
maintained, retained and motivated. Otherwise, employee performance and
satisfaction may decline giving rise to employee turnover.
Table 2: HRM Objectives and Functions

HRM Objectives Supporting Functions

A. Societal Objectives 1. Legal compliance
2. Benefits
3. Union-management relations

B. Organisational Objectives 1. Human resource planning

2. Employee relations
3. Selection
4. Training and development
5. Appraisal
6. Placement
7. Assessment
13
Introduction
to Human
C. Functional Objectives 1. Appraisal
Resource 2. Placement
Management
3. Assessment
D. Personal Objectives 1. Training and development
2. Appraisal
3. Placement
4. Compensation
5. Assessment
Source: William B. Werther, Jr., and Keith Davis, Human Resources and Personnel
Management, p. 15.

In order to achieve the above objectives, human resource management

undertakes the following activities:
Human Resource Planning, i.e., determining the number and kinds of personnel require
Recruitment, selection and placement of personnel, i.e., employment function.
Training and development of employees for their efficient performance and growth.
Appraisal of performance of employees and taking corrective steps such as transfer from
Motivation of workforce by providing financial incentives and avenues of promotion.
Remuneration of employees. The employees must be given sufficient wages and fringe
Social security and welfare of employees.

1.5 IMPORTANCE OF HRM

HRM is the central sub-system of an organisation (Figure 1).

Finance Sub-system

Technical Sub-system,
Material sub-system HRM
Sub-system

Marketing sub-system

Figure 1: HRM as central subsystem in an organisation

Source: Gupta, 1997

14
Introduction
to Human
Resource
Management

14
As the central sub-system, HRM interacts closely and continuously with all Concept and
other sub-systems of an organisation. The quality of people in all sub-systems Evolution of
Human
depends largely upon the policies, programmes and practices of the HRM Resource
sub-system. Management

The quality of human resources determines in turn the success of an

organisation.
The importance of HRM can be discussed at four levels – corporate,
professional, social and national (Gupta, 1997).
Significance for a Corporate: Human resource management can help an
enterprise in achieving its goals more efficiently and effectively in the
following ways:
a) Attracting and retaining the required talent through effective human
resource planning, recruitment, selection, placement, orientation,
compensation and promotion policies.
b) Developing the necessary skills and right attitudes among the employees
through training, development, performance appraisal, etc.
c) Securing willing co-operation of employees through motivation,
participation, grievance handling, etc.
d) Utilising effectively the available human resources.
e) Ensuring that the enterprise will have in future a team of competent and
dedicated employees.
1) Professional Significance: Effective management of human resources
helps to improve the quality of work life. It permits team work among
employees by providing a healthy, working environment. It contributes
to professional growth in the following ways:
a) Providing maximum opportunites for personal development of each
employee.
b) Maintaining healthy relationships between individuals and different
work groups.
c) Allocating work properly.

2) Social Significance: Sound human resource management has a great

significance for the society. It helps to enhance the dignity of labour in
the following ways:
a) Providing suitable employment that provides social and
psychological satisfaction to people.
b) Maintaining a balance between the jobs available and the jobseekers
in terms of numbers, qualifications, needs and aptitudes.
c) Eliminating waste of human resources through conservation of
physical and mental health.

15
Introduction 3) National Significance: Human resources and their management plays a
to Human vital role in the development of a nation. The effective exploitation and
Resource
Management utilisation of a nation‘s natural, physical and financial resources require
an efficient and committed manpower. There are wide differences in
development between countries with similar resources due to differences
in the quality of their people. Countries are underdeveloped because their
people are backward. The level of development in a country depends
primarily on the skills, attitudes and values of its human resources.
Effective management of human resources helps to speed up the process
of economic growth which in turn leads to higher standards of living and
fuller employment.

1.6 SCOPE OF HRM

According to Dale Yoder, the scope of human resource management is very wide.
It consists of the following functions:
Setting general and specific management policy for organisational relationships, and es
Collective bargaining, contract negotiation, contract administration and grievance handl

iii) Staffing the organisation, finding, getting and holding prescribed types
and number of workers.
iv) Aiding in the self-development of employees at all levels providing
opportunities for personal development and growth as well as for
acquiring requisite skill and experience.
v) Developing and maintaining motivation for workers by providing
incentives.
vi) Reviewing and auditing manpower management in the organisation.
vii) Industrial relations research—carrying out studies designed to explain
employee behaviour and thereby effecting improvement in manpower
management.
The Indian Institute of Personnel Management (IIPM) has described the
scope of human resource management into the following aspects:

16
 1) The Labour or Personnel Aspect: It is concerned with manpower Concept and
planning, recruitment, selection, placement, induction, transfer, Evolution of
Human
promotion, demotion, termination, training and development, layoff and Resource
retrenchment, wage and salary administration (remuneration), incentives, Management
productivity, etc.
2) The Welfare Aspect: This aspect is concerned with working conditions
and amenities such as canteens, creches, rest rooms, lunch rooms,
housing, transport, education, medical help, health and safety, washing
facilities, recreation and cultural facilities, etc.
3) The Industrial Relations Aspect: This is concerned with the company‘s
relations with the employees. It includes union-management relations,
joint consultation, negotiating, collective bargaining, grievance handling,
disciplinary actions, settlement of industrial disputes, etc.
All the above aspects are concerned with human element in industry as
distinct from the mechanical element.

NATURE OF HRM
Human Resource Management is a process of bringing people and
organizations together so that the goals of each are met. It tries to secure the
best from people by winning their wholehearted cooperation. In short, it may
be defined as the art of procuring, developing and maintaining competent
workforce to achieve the goals of an organisation in an effective and efficient
manner. It has the following features:
1. Pervasive force: HRM is pervasive in nature. It is present in all
enterprises. It permeates all levels of management in an organisation.
2. Action-oriented: HRM focuses attention on action, rather than on
record-keeping, written procedures or rules. The problems of employees
at work are solved through rational policies.
3. Individually oriented: It tries to help employees develop their potential
fully. It encourages them to give their best to the organisation. It
motivates employees through a systematic process of recruitment,
selection, training and development coupled with fair wage policies.
4. People-oriented: HRM is all about people at work, both as individuals
and groups. It tries to put people on assigned jobs in order to produce
good results. The resultant gains are used to reward people and motivate
them toward further improvements in productivity.
5. Future-oriented: Effective HRM helps an organisation meet its goals in
the future by providing for competent and well-motivated employees.
6. Development-oriented: HRM intends to develop the full potential of
employees. The reward structure is tuned to the needs of employees.
Training is offered to sharpen and improve their skills. Employees are
rotated on various jobs so that they gain experience and exposure. Every
attempt is made to use their talents fully in the service of organisational
goals. 17
 7. Integrating mechanism: HRM tries to build and maintain cordial
relations between people working at various levels in the organisation. In
short, it tries to integrate human assets in the best possible manner in the service of an organisation.
8. Comprehensive function: HRM is, to some extent, concerned with any
organisational decision which has an impact on the workforce or the
potential workforce. The term ‗workforce‘ signifies people working at
various levels. Including workers, supervisors, middle and top managers.
It is concerned with managing people at work. It covers all types of
personnel. Personnel work may take different shapes and forms at each
level in the organisational hierarchy but the basic objuective of achieving
organisational effectiveness through effective and efficient utilization of
human resources, remains the same.
9. Auxiliary service: HR department exist to assist and advise the line or
operating managers to do their personnel work more effectively. HR
manager is a specialist advisor. It is a staff function.
10. Inter-disciplinary function: HRM is a multi-disciplinary activity,
utilizing knowledge and inputs drawn from psychology, sociology,
anthropology, economics, etc. To unravel the mystery surrounding
human brain, managers, need to understand and appreciate the
contributions of all such ‗soft‘ disciplines.
11. Continuous function: HRM is not a one shot deal. It cannot be practiced
only one hour each day or one day a week. It requires a constant
alertness and awareness of human relations and their importance in every
day operations.

COMPONENTS OF HRM
Following are the major components of HRM (Sarma, 1998).

Human Resource Organisation: Human resource organisation is concerned

with achieving success by organisation design and development, motivation,
the application of effective leadership, and the process of getting across the
message about what the enterprise is setting out to do and how it proposes to
do it. The fundamental objective of human resource organisation is to ensure
that every aspect of the organisation, employment, motivation, and
management of people is integrated with the strategic objectives of the
business and contribute to the successful achievement of those objectives.
The human resource organisation programme has to take account of cultural
issues so that the desired corporate culture can be developed or reinforced.
Moreover, organisational development programmes and interventions are
needed to achieve better integration, improve teamwork, motivate human
resource, develop proper leadership, facilitate communication system,
manage conflict and change, and obtain commitment.
Human Resource Planning: Human resource planning sets out to define
how many people the organisation wants; the type of people the organisation
needs at present and in the future, in terms of their expertise; and how they

18
―fit‖ the corporate culture. It involves the forecasting of both the supply and Concept and
demand for future labour. It provides the base for recruitment programmes Evolution of

and for human resource development plans. Human

Resource
Management
Human Resource Systems: Human resource systems are the essential
programmes needed to recruit, appraise, pay and look after the health, safety
and well-being of the employees in the organisation. The main key
programmes are:
a) Recruitment management: It is a process of obtaining the required
human resource for an organisation.
b) Information management: It is a method of ensuring that all policies
and practices are to be well articulated and effectively communicated to
the workforce.
c) Training management: It is a system of identification of training needs,
preparation of a training strategy, and an appropriate training system.
d) Performance management: It is a technique of appraising performance
systematically against defined criteria, reviewing progress to date and
assessing the potential for advancement. There are three main appraisal
systems such as performance appraisal, potential appraisal, and
performance coaching or counselling.
e) Reward management: It is a method to ensure that people are rewarded
in accordance with their contribution.
f) Career management: It is a system of charting special career paths for
the individual employees for advancement in the organisation.
g) Health and safety management: It is a system of maintaining a healthy
and safe system of work in an organisation.
h) Discipline management: It is a system of administering discipline to
foster positive employee behaviour that will promote organisational
objectives.
i) Culture management: It is a system of thinking and behaving shaped by
the values, attitudes, rituals and sanctions in an organisation.
Human Resource Development (HRD): Rao (1985) defines HRD as ―a
process by which the employees of an organisation are helped, in a
continuous planned way to: (a) acquire or sharpen capabilities required to
perform various tasks and functions associated with their present or expected
future roles; (b) develop their general enabling capabilities as individuals so
that they are able to discover and exploit their own inner potentials for their
own and/or organisational development purposes; and (c) develop an
organisational culture where superior-subordinate relationship, team-work,
and collaboration among different sub-units are strong and contribute to the
organisational health, dynamism and pride of employees.‖
Human Resource Relationships: Human resource relationships deal with
the handling of employees individually and collectively asmembers of trade
unions or staff associations. Their main aim is to increase co-operation and
19
Introduction trust and to involve employees actively in the company‘s affairs. It also deals
to Human with problem-solving techniques, particularly to solve problems relating to
Resource
Management disciplinary cases and grievances. There are two sides to a dispute in most
organisations: the management and the workers. There is a gap and the means
have to be found to bridge that gap. Whether or not unions exist, it is highly
desirable for the management to develop methods of dealing with employees
collectively. Nonetheless, relationships with unions often involve
confrontations. The necessary techniques must be evolved for encouraging
mutuality and working together in the interests of all.
Unions have to be managed like everything else in an organisation.
Management normally gets the union it deserves. If it handles unions the
wrong way, the results for the organisation can be disastrous. An approach to
collective dealing should be:
(a) the recognition of the union, (b) the respective role performance of
management and union, (c) the type of procedures one can adopt to regularize
relationships with unions, (d) the basic techniques of negotiating with unions,
(e) the mechanism of involvement through participation, both traditional
forms of joint consultation as well as the Japanese import of quality circles.
Human Resource Utilisation: According to Peters and Watennan, to
achieve productivity through people, it is very essential to ―treat them
as adults, treat them as partners, treat them with dignity, and treat them with
respect.‖ These fundamental human relations values provide the base for
productivity management programmes, which use techniques such as method
study to improve efficiency. Both managers and workers must be persuaded
somehow to realise that they have a common interest in increasing output.
The following actions are required to improve the use of human resources:
(a) conduct a productivity drive; (b) improve manpower budgeting and
control techniques;
(c) introduce work measurement; (d) use appropriate payment method by
results; bonus and profit-sharing schemes; (e) improve motivation; (f) involve
employees in improvement programmes; (g) introduce new technology; (h)
negotiate appropriate productivity agreements; and (i) introduce training
programmes based on an analysis of productivity needs.
Human Resource Accounting (HRA): HRA means accounting for people
as the organisational resource. It is the measurement of the cost and value of
people to organisations and involves measuring the costs incurred on
recruiting, selecting, hiring, training and developing employees and judging
their economic value to the organisation. HRA can be very useful in
managerial decision-making. For instance, whether it is recruitment and
selection or replacement of an employee, HRA can provide an estimate of the
cost involved in the process.
Similarly, it can help the management in budgeting for development of
human resources. HRA can also provide data pertaining to turnover costs, the
cost of employee‘s absence and its impact on performance of others.

20
 Human Resource Audit: The purpose of a human resource audit is to assess Concept and
the effectiveness of the human resource function and to ensure regulatory Evolution of

compliance. Human resource audit is a vast subject and covers many delicate Human
Resource
aspects of human and organisational interactions. Management

The HRD auditor has to study the organisation design, its objective,
performance of its human resources, as well as the proper maintenance of
HRD climate and practices. The job of the HR auditor is not an easy one. To
gain success, he has to be very selective about the area and procedure he
wishes to follow. Auditing in the field of human resources is a difficult job,
more so because unlike other audits, the auditor has to deal with individuals
vis-a-vis organisational priorities. Therefore, the HR auditor is required to be
very systematic in his job and define the task clearly as to which arena he has
to cover.

SUMMARY
The human resources of an organisation represent one of its largest
investment. The objectives of HRM include getting the organisation right,
providing effective motivation and leadership, obtaining and developing the
right people, paying and treating them fairly, and getting them involved in
working productively. The attainment of these objectives necessitates the
performance of several functions. The main HRM systems are: (1) appraisal
system; (2) career system; (3) training system; (4) work system; (5) cultural
system; and (6) self-renewal system. All systems and sub-systems of HRM
must be incorporated in the organisation while setting the goals and
objectives. This will also integrate the purposes and processes and make
HRM more meaningful. Human resources functions are many and varied and
include such things as human resource planning, recruiting, selecting,
training, counselling employees, compensation management, and employer-
employee relations. In small organisations, most human resource functions
are performed by owners or operating managers. Large organisations usually
have a human resource or personnel department that is responsible for co-
ordinating and directing the human resource functions. Successful human
resource management is essential to organisational growth and success. In the
light of new challenges, there are indications that human resource people will
play an increasingly important role in an organisation‘s long-range planning
and policy-making activities.

SELF ASSESSMENT QUESTIONS

1. Define HRM and distinguish it from personnel management.
2. Describe the evolution of HRM and give an overview of its evolution in
India.
3. Explain the importance and scope of HRM.
4. Elaborate the nature of HRM and its relevance in current scenario.
5. What are the components of HRM?
21
22